The admission, which amounts to a direct criticism of former prime minister Kevin Rudd, came as Mr Shorten reasserted Labor's belief in serious climate policy, recommitted the party to an emissions trading scheme going into the 2016 election, and reminded Clive Palmer that an ETS had already been legislated.

The comments came as Tony Abbott signalled the government was already strongly inclined to cut the 20 per cent renewable energy target (by 2020) even before hearing from the Warburton inquiry into its effects on the current electricity market and economy, due later this month.

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The Prime Minister said it was clear the requirement to use wind and solar was driving household prices and helping to make Australia the ''unaffordable energy capital of the world''.

''Obviously, the point I have been making pre-election and post-election is that the renewable energy target is very significantly driving up power prices,'' he told the ABC's AM program.

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''I think we should be the affordable energy capital of the world, not the unaffordable energy capital … and that's why the carbon tax must go and that's why we're reviewing the renewable energy target.

He said the Coalition would wait for the review before acting, but left room for doubt as to his attitude.

Any move to cut the target - which stipulates 20 per cent of the country's large-scale electricity should be sourced from renewable energies by 2020 - would put the government on a collision course with the Palmer United Party, after Mr Palmer announced last week that his senators would block any change until at least 2016.

The government is considering reducing the target to a ''true 20 per cent'' rather than the 41,000 gigawatt hours quota, with one option being a blanket exemption for aluminium producers.

Mr Shorten said Labor would have to wear its failure to sell the case for emissions trading but also should carry some of the blame for squandering the political moment.

''I think in 2009 we underestimated the political challenge that Turnbull was under internally,'' Mr Shorten told an Australian Financial Review/Crawford School conference at the Australian National University.

''I think we thought we had a deal with Turnbull and [Ian] Macfarlane … we thought we had that nailed down, locked down.''

With the issue of carbon pricing returning to political centre-stage in several economies, two eminent economists declared support for some form of pricing mechanism.

Former Reserve Bank board member Warrick McKibbin described Labor's design of the ETS as ''a mistake'' but one that should be fixed rather than just scrapped.

''I think you can fix it under the current government … we have to do something,'' he said. ''I think that we risk the economy's future by dismantling these institutions.

''People say you shouldn't take action in Australia on climate policy. I think you can take action to create the framework to meet goals that are in our self-interest; that's different to the sort of polices that have been pushed up until now.''

Nobel prize-winning economist Joseph Stiglitz said it was ''better to tax bad things than good things''.

The better way to generate revenue, taxing labour and savings or carbon, was a no-brainer. ''Taxing carbon makes more sense.''